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[Dwer]

Option Expiration Day (quadruple). No Headline Call or TCF setups for today. Market Bias is Bearish.

Trade Setup Summary for Thursday, March 18, 2004:
1) Buy 1114.75/ Sell 1112.50 -2.25 pts. (Buy B/D -1pt. on TB 3rd level move/ exit with small loss-no response)

2) Re-enter Buy at 1112.50 or lower/ Cover for up to +6pts (Re-enter buy at Buy Pivot -4.25 (1111.75) holding support)

TOTAL: UP TO +3.50 OR HIGHER DEPENDING ON EXIT ON AFGHANISTAN NEWS.

Recap of Thursday's Action:
Good Morning. Welcome to Option Expiration Friday.

I am very pleased to announce my LONG AWAITED (I've been getting flooded with requests for years) INTRADAY LIVE UPDATE SERVICE.

This is going to open a whole new dimension to the 21st Century Futures Morning Call service in that I will be providing rapid updates on the market action via our high speed Email service. PLEASE CLICK ON THE STAR FOR MORE INFORMATION.

Basically, what I have designed this service to be is the closest thing I could arrange to having me sitting right at your desk with you making comments. This service has been a long time in developing and I had to really consider this for a long time as it is quite a daily committment...but totally worth it. This means I will be able to update you LIVE right in the middle of the action each day. I've kept the price very reasonably low compared to other live update services which I've seen run as high as 600$ a month and more.

I can usually get fast information from my floor contacts and others as to what caused certain moves in the S&P500 as well as continuous updates on my 18 proprietary indicators. In addition to that I can give you instant updates on the High Five and other indicators that are used in synthesizing the entire days picture. I will also be doing ongoing narrations of which Trailblazer patterns are forming and what we will be looking for when we are in a trade position. Now you can see why I am excited.

The action on Wednesday started out with the rather typical action we have seen lately where the market pushes through the BreakDown and keeps pressing lower. This has been a problem especially the last few months since the markets changed dramatically in relation to our TCF setups.

In the past it was pretty reliable to be able to Buy the BreakDown IF we were not in a Bear Ugly type market setup and see prices move up. We have seen the last 4-5 BreakDowns sell off substantially WITHOUT a Bear Ugly news type situation which our TCF calls for in order to short the B/D.

Wednesday apppeared to be heading for the same type of action BUT our indicators and Morning Call alert were looking for the early lows on a gap lower to move higher so we recommended getting long.

The Buy Pivot -4.25 stop/pivot was sitting at 1111.50 and we wanted to be sure support was coming in at that price. We had first got long on a 3rd level move lower on a Trailblazer setup which got us long a point below the B/D at 1114.75.

According to our TB rules when we do not see a response to the 3rd level move we need to get out quickly and look to buy at the next level lower. This is exactly what occured so we jumped out of the long. Some time after prices pushed lower, tapped the 1111.50-.75 TICK and moved higher. We recognized support coming in and re-entered long.

Trade was holding support which was comforting and then prices began to rise very steadily. We had been looking for a push above 1116.50 or higher on the first long and all we got was 1116.00 before they pulled back. Now we had 1117.00 in the blink of an eye. Our big goal on the long was a trip back to the bottom of the Value Area at 1118.75 and all of a sudden prices blew up there in hard, fast spikes.

We got our goal and recommended getting out on those hard, fast upspikes and fills should have occured around 1116.00-1117.50 as prices dropped off rapidly from the 1118.75 area. Whew! It was fast.

In checking my floor contacts found out it was the Al Queda rumour. Oh Yes, sure...those guys again. Remember, we have seen several spikes up the last few months on the floor about rumours of Bin Laden capture and all that stuff. Those rumours can fade out fast and holding long can cost you dearly.

So we were glad to be out with a profit on the trade. Sure, later they moved some points higher but we followed our rules. That is what counts in the S&P500 business...SURVIVAL. Not pretending you are going to catch every move. That is for dreamers.

Today's Call & Briefing:
No Headline Call today as it's Option Expiration. The market bias is bearish and we are expecting a continued washout of prices soon.

As mentioned before (Thursday/Friday 11-12th) we have moved to a BUY MODE and we identified the washout of lower prices below 1105.00. Our Headline Call on Tuesday was looking for a final washout around 1097.00 before moving up but the market gapped up that day and moved higher. I expect we are preparing for that lower washout very soon now. Trade below 1119.00 should send em lower and we could see some dramatic downside action.

I had mentioned yesterday on the Morning Call these two quotes:

*If we open lower on a gap and press lower then prices will stabalize and rise higher today possibly stretching up to the 1127-28 area where we want to watch for a short trade.

* still feel we may have one more powerful washout to the downside before really taking off to the upside OR we could make a rather sloppy, quick move up towards 1135.00, cross over the Pit Bull briefly and then pull right back.

In these notes I am referring to the two points of resistance of 1127-28 and 1135 which was mentioned as the first level up of the new Buy Mode. I am now getting concerned that we are moving into an aberration on the Buy Mode now that we have had a run up from where I identified the bottoming area of 1101-1105.00. It appears that another rather scary "washout" is coming and that would fufill that 1097.00 zone mentioned on Tuesday's Headline Call.


Be careful about buying into the news. We need to consider it as the mainstream news affects the markets but it is not very genuine. Wednesday was a classic example of seeing the news touting an atmosphere of some kind of "victory" in capturing a major Al Queada operative, talking of his history and involvement with Bin Laden on Television, etc. when at the same time the President of Pakistan was on confirming that they really had NO INFORMATION as to whether that specific person was really even involved in the standoff. Technically I would think this should be illegal to broadcast false news to manipulate the markets but it goes on CONSTANTLY now a days. Beware of the B.S.

As traders we ALWAYS have to have a "fading mentality" in which we learn to develop a mindset that is always doubting the mainstream appearances of things. It is crucial to a real S&P500 traders survival.

Value Area: 1,114.00 - 1,121.30
Watch this area for support if prices are to stay bullish. Trade below 1119.00 is going to continue the downtrend and throw the new Buy Mode into a temporary aberration as we look for another lower washout.

Buy Pivot Target: 1,114.75 - 1,115.75
This Target is right at the bottom of the Value Area so we may see some support coming in here for the option expiration action today. If they hold below 1119.00 and push below this area (and especially the -4.25 stop/pivot) then the new lows on the washout should show up soon.

Sell Pivot Target: 1,127.75 - 1,126.75
This target for today is situated at the zone we mentioned as first strong resistance in the Buy Mode we entered around 1104-5.00 recently. Next level up is 1135 to complete first level up Buy Mode goal.

10 Day "Pit Bull" Moving Average: 1,124.50
We have slightly Crossed over the Pit Bull and now pulled back to rest on it. Holding below the Pit Bull means the Crossover is not strong and most likely prices will resume their drop.

Pro Trader's Action
No Headline Call or TCF trade setups today. On these days where there is no Headline Call there will also not be any live updates. Watch for all the TCF price targets we discuss above for support and resistance. We are expecting the markets to fade again after reaching upper level resistance areas.

Good luck in your trades and be sure to check out our new Live Update service for adding that extra precision dimension to your trading.

I'll look forward to seeing you in the live action. All the best, Mohan